(ABC4) – The Federal Trade Commission (FTC) has sued Walmart alleging that the retail giant turned a “blind eye to fraud.”
The lawsuit was filed by the FTC on Tuesday which accuses Walmart of allowing its money transfer services to be used by “fraudsters” who deprived customers of hundreds of millions of dollars.
The FTC alleges that the company turned a blind eye while scammers took advantage of its failure to properly secure the money transfer services offered at Walmart stores.
Walmart allegedly did not properly train its employees, failed to warn customers, and used procedures that allowed those who committed fraud to cash out at its stores.
The FTC has asked the court to order Walmart to return money to consumers and to impose civil penalties for Walmart’s violations.
“While scammers used its money transfer services to make off with cash, Walmart looked the other way and pocketed millions in fees,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Consumers have lost hundreds of millions, and the Commission is holding Walmart accountable for letting fraudsters fleece its customers.”
While scammers made off with hundreds and thousands of dollars, consumers got the short end of the stick because money lost through money transfers is nearly impossible to retrieve after the money has been picked up.
Scammers who participated in popular telemarketing schemes such as IRS impersonation calls, “grandparent” scams, sweepstake scams, and more, relied on Walmart money transfers as a primary way to receive payments.
According to information from fraud databases maintained by MoneyGram, Western Union, and Ria, from 2013 to 2018 more than $197 million in payments that were the subject of fraud complaints were sent or received at Walmart, with more than $1.3 billion in related payments also possibly connected to the fraud.